Republican Governors Get OK From Trump Administration to Gut Medicaid

For the first time in the program’s history, beneficiaries would have to prove they are working to receive health insurance. Hundreds of thousands could lose coverage.

01.12.18 3:40 PM ET

Photo Illustration by The Daily Beast

On Friday afternoon, Kentucky made history by imposing a work requirement on the state’s Medicaid program, the first of its kind in the federal program’s 50-plus-year history.

The decision was made quickly after the Trump administration approved a waiver submitted by Gov. Matt Bevin, a Republican. The Centers for Medicare and Medicaid Services sent a letter to state Medicaid directors on Thursday permitting them to impose work requirements on recipients. Republicans say it will encourage recipients to get involved in their communities and pull them out of poverty. Critics say it will amount to thousands in several states losing coverage.

Nine additional states are awaiting approval for waivers with various kinds of requirements, including Wisconsin, North Carolina, Utah, and Kansas.

Kentucky has at least 2 million people covered by Medicaid. Under the new rules, beneficiaries without specific exemptions will have to complete 80 hours a month of work, education, or community service. (Those who are exempt from these requirements include former foster care youth, pregnant women, medically frail individuals, and primary caregivers.) “Failure to demonstrate compliance,” according to Kentucky’s new requirement, will see beneficiaries’ Medicaid eligibility suspended.

CMS has also granted Kentucky the ability to lock out recipients for six months if they fail to re-enroll on time after a potential suspension.

The new rules will help “people rise out of poverty,” CMS administrator Seema Verma said in a conference call with reporters on Thursday.

But that’s not how one of Kentucky’s own representatives sees it.

“Make no mistake: people will die because of this,” Rep. John Yarmuth, the state’s only Democrat in Congress, said in a statement to The Daily Beast.

“Thousands of Kentucky families will face financial ruin,” he continued. “Governor Bevin and President Trump are creating an entirely unnecessary crisis in our Commonwealth for entirely political reasons. It is an unconscionable attack on our state’s health, and I will continue to fight for every Kentuckian to get the health care they need and deserve.”

What’s more is that advocates and other politicians have pointed to the fact that most Medicaid recipients do in fact work and that being healthy is often a precursor to even holding down a job and that specific state requirements could be challenged legally. The move is seen as a piece of the administration’s assault on the Affordable Care Act, which expanded Medicaid eligibility to give millions more health insurance coverage.

“Make no mistake: people will die because of this.”

— Rep. John Yarmuth

“Today’s attack on Medicaid is just the latest salvo of the Trump Administration’s 2018 war on health care,” Brad Woodhouse, director of the Protect our Care campaign, told The Daily Beast. “Having faced overwhelming public rejection of their failed attempts to repeal health care, Trump and his Congressional Republicans are now going for death by a thousand cuts.”

Requiring recipients to demonstrate a form of employment could cause people to lose coverage simply by falling through the cracks, critics of the work requirement say.

Get The Beast In Your Inbox!

Daily Digest

Start and finish your day with the top stories from The Daily Beast.

Cheat Sheet

A speedy, smart summary of all the news you need to know (and nothing you don't).

You are now subscribed to the Daily Digest and Cheat Sheet. We will not share your email with anyone for any reason.

“Everybody has to go through the bureaucratic nightmare of submitting paperwork to prove that they are working,” Leonardo Cuello, director of health policy at the at the National Health Law Program explained to The Daily Beast. “The actual impact of this thing is terminations.”

Most advocates say they just really don’t know exactly how this will play out and just how bad it could be for the state’s recipients.

“We just don’t have a lot of detail. It’s worrisome,” Andrea Callow, associate director of Medicaid Initiatives at Families USA told The Daily Beast. “I think I’ve seen it referred to as the Wild Wild West.”

Callow said she’s specifically concerned about the opioid crisis and the potential for an individual to get locked out of coverage while attempting to get addiction treatments like Suboxone. CMS guidance indicates that states have a lot of flexibility and that people with opioid addiction could be exempted or permitted to have treatment count towards required work.

“I think any program that is going to take coverage away from people in a state that is struggling so mightily with an opioid epidemic, is inevitably going to chill the state’s ability to address the epidemic,” Callow said.

Additionally a state could provide certain additional exemptions from the work requirement, for instance for people in rural areas who may have fewer job opportunities. That in turn, could create a scenario in which urban dwellers, potentially more people of color, might face a stiffer requirement for coverage.

When the news from CMS came out, some Republican governors were openly enthused about the prospects for their states.

“This is good news for Arkansas,” Republican Governor Asa Hutchinson said in a statement to The Daily Beast. “I had a conference call earlier this week with the acting HHS Secretary and CMS Administrator Verma on this topic, and I was advised that this was coming, so this is proceeding very quickly at this point. I will review the details of the guidance very carefully, but I expect that our waiver request will be in line with their guidance.”

And CMS may approve Indiana’s waiver in no time at all.

“We expect to receive full approval of the HIP [Healthy Indiana Plan] waiver application in the coming days, which will allow for the continuation of health insurance coverage for over 400,000 Hoosiers for an additional three years,” Dr. Jennifer Walthall, secretary of the Indiana Family and Social Services Administration told The Daily Beast.

Cuello said he believes the work requirement is against the law because it challenges the very intent of Medicaid itself. Kentucky’s change is likely to face a lawsuit as a result.